Future of SA’s automotive industry

News Anchor: Mhm.

Welcome back now. Motor companies want key elements of former trade industry and competition. Minister Ibrahim Patel’s policies around electric vehicles. Amended to help create a local market for EVs and protect the future of the automotive industry as a whole. Similarly, NAMSA has also lent itself to discussion around the future of automobile manufacturing.

This week, the organization CEO, Mike Masa joins us with more detail. Thank you so much for your time. Mark. Let’s, Micah, let’s actually start off with the shortcomings of the current EV policy. Talk to me about those.

Mike Mabasa: Yeah, absolutely. And good afternoon. The biggest challenge we have with the current, um, construct of the white paper policy is that it’s focusing mainly on very specific drive trains, in particular electric vehicles that are battery powered or fuel cells, uh, power.

And, uh, you may be aware that the technology specifically in relation to new energy vehicles is much broader than just, um, electric vehicles. that are powered through a battery of fuel cells. You’ve got hybrid vehicles, both your traditional hybrids. You also have your plug in hybrids. And then we also have hydrogen that is also beginning to play a very, very important role in our economy.

South Africa has also put a very, very strong policy pronouncements around how they want to enhance and also support hydrogen. And we believe very strongly that as the automotive industry the space for us to be able to play also in that particular space. So there are limitations in the current policy and we want the minister to broaden that particular policy because also other markets that were competing against Uh, globally, I’m looking at the multiplicity of different technologies, uh, that they’re bringing in, in order to be able to make sure that they’re able to diversify this new energy vehicle ecosystem.

News Anchor: Uh, Mike, it’s actually quite interesting what you say. So, um, is there a specific reason why Ibrahim Patel, uh, is So, is it had not included, um, hybrid vehicles, for example, when it comes to, uh, those manufacturing, uh, incentives, or is it just, um, a kind of narrow view on what electric vehicles are at this point?

Mike Mabasa: Well, I think the former minister’s view has always been around the fact that, remember, South Africa, uh, is a very strong manufacturing base. Uh, 66 percent of the vehicles that we’re producing. in the country is export, uh, you know, uh, you know, based and also exported into 148 different markets around the world.

And many of those markets in Europe have already indicated that by 2030 and some 2035, they are going to be, uh, banning, uh, you know, internal combustion engines. And there will be focusing mainly on, uh, electric vehicles that electric as specific. So we know that those countries have since obviously changed their position and they have expanded their, their, their reach, uh, to also allow for a broader definition, uh, of new energy vehicles, uh, that also include hybrids.

So when the white paper was actually constructed, the minister’s focus at the time was obviously on making sure that As a country, as we manufacture and rightly so, and we’re not necessarily pointing fingers at the minister because at the time the world was obviously moving, uh, you know, uh, extremely and, and, and quite, uh, significantly into the better electric ecosystem.

But we now know that that ecosystem has now since expanded. And that’s why we also want now. our minister to also, uh, you know, expand our current policy pronouncement to make sure that we are able to accommodate for a much more broader ecosystem.

News Anchor: Mike, how urgent would amendments have to be made to South Africa’s EV policy?

Um, you talk about, obviously, that most of the vehicles that we produce, uh, are exported and the export markets have put in targets in terms of when they would ban ICE vehicles. But I mean, demand has sort of shifted there, uh, to the point where consumers are starting to see some shortcomings in that EV market where now demand is softer.

So how urgent or how much can we take our time with this, uh, you know, uh, desired EV policy in South Africa?

Mike Mabasa: Well, look, it is urgent because remember all the, uh, plans and all the OEMs that are manufacturing vehicles are currently reinvesting, um, in their production processes, they’re reinvesting in their plants, and they need to know, uh, very early on, uh, what kind of investments they need to think about, so that they can be able to recalibrate their plans in line with, uh, these newer technologies that they, they require.

And, and, and certainly if a more, a model is introduced, it takes us about seven years, uh, you know, to introduce that model. before it actually gets into the market. So, uh, we need policy to change, uh, even though the production cycle of those vehicles is going to happen in the next 5 to 7 years. Uh, at least policy must, um, you know, be adjusted now so that it can help us, uh, to plan accordingly, to invest accordingly, and to make sure that we’re able to calibrate.

And then also most importantly to also train our people because remember these changes that we are now currently working on are very seismic. So the current cohort of employees that we have in our production plants need to be retrained so that we can really be able to make sure that as we move into the production of newer energy vehicles, they are ready to be able to take on those new technologies so that we can be able to make sure that we are able to save jobs because in South Africa in particular, we’ve indicated very clearly to many of our manufacturing plants.

that we don’t want to lose jobs. We don’t want them to bring too many robots into these plants so that we can be able to make sure that we don’t increase our unemployment rate and retain as many jobs as possible in our market.

News Anchor: Mike, let’s come back to the domestic market. Is the South African consumer market ready for an EV, a progressive EV policy or is it a case of without progressive policy, there’ll be no market.

Mike Mabasa: But look, it is also for this reason that we want hybrid vehicles to be included in our policy. Because remember, in order to encourage people to move, you know, from one extreme to the other, because the current policy says ditch your internal combustion engine and choose, you know, a better electric vehicle.

And what we’re saying and requesting the minister to say, let’s introduce transitional Uh, technology so that we can be able to nicely transition so that the person who’s driving from Sina mm-hmm. in oppo to Cape Town, that person has the best of both worlds. Uh, a person has a battery in his vehicle and he can still be able to put petrol, uh, you know, so that we can also deal with, uh, you know, this, um, you know, range anxiety because a lot of consumers.

are still very reluctant to move purely into battery electric because South Africa is a very vast country. Uh, you know, it’s more than 2000 kilometers to drive from Musina to Cape Town. And, uh, you know, people need to know whether am I going to plan for that trip for two days or more. Um, but if they know that they can still stop at a Shell garage or a BP garage and still pour petrol while they still have a battery, it also helps us to be able to socialize Uh, this new technology and that’s why we feel that it is important for the minister to help us to uh, to tweak uh, the current policy to make sure that we are able to also uh, push for demand uh, for this newer technologies.

Uh, and the and the best way to socialize it is to actually get the technology onto people’s hand as opposed to them refusing to even buy these vehicles because they don’t know what they don’t know.

News Anchor: Alright, well, thank you so much uh, for that and for your insights uh, Mike much appreciated. That was NAMSA CEO Mike Mabasa.

Mhm.

Source: https://youtu.be/jLDgoDb7mXw